Relative to notifying broker prior to termination of coverage

The bill requires insurance companies to notify the agent of record at least 21 days before a life, disability, or long term care insurance policy is set to lapse. This notification can be sent electronically or by mail. The agent, once notified, is not held responsible for the lapse. The bill outlines exceptions where the insurer is not required to notify the agent, which include cases where the insurer has an online system or a procedure in place for agents to check impending lapses, if there's no current agent of record, or if the agent is employed by the insurer or its affiliate.

Supporters argue that the bill provides an additional layer of protection for policyholders by ensuring their agents are informed about impending lapses in coverage. This allows agents to intervene, offering a safeguard against accidental lapses. The bill strengthens communication between insurers and agents, potentially leading to better service and policyholder satisfaction.

Critics might say the bill imposes unnecessary administrative burdens on insurance companies, potentially increasing costs that could be passed on to consumers. The exceptions could also be viewed as loopholes that lessen the bill's effectiveness, as insurers could bypass the notification requirement if they employ certain internal procedures.